October 23, 2018

Party funding talks stir up much debate

It was the textbook-perfect exercise in how South Africa’s legislative process should work, until it hit the snag of a rampant budget.

The Ad Hoc Committee on the Funding of Political Parties was well on its way through a second round of public hearings about the draft bill, on target for presentation to Parliament as requested by the end of November, until it heard what the Independent Electoral Commission (IEC) had to say.

Until that point the process had been movingly along swimmingly. It may have taken 20 years for Parliament to reach this point, but since August 2017 it has rapidly been making up for lost time.

Much is to be attributed to the leadership of its unflappable Chairperson Vincent Smith, who has driven a process that has repeatedly had Parliament stumped in the past. This year is the first time that the legislature has seriously applied itself to drawing up legislation to bring the vexed issue of party political funding into the public domain.

Public submissions were heard in August from almost 20 civil society organisations and, drawing on their input, a draft bill was ready for public comment in record time. The chief proposal of the draft Political Party Funding Bill was for the IEC to manage the implementation of party funding via a Multi-Party Democracy Fund (MPDF).

The Multi-Party Democracy Funds would require an estimated R45 million start-up.

But this may be the point at which the process hits its first real stumbling block. The IEC welcomed the proposed legislation in its submission, but warned that it was already cash-strapped and the proposal would require an estimated R45 million start-up fund. This amount stunned Committee members.

The IEC argued that managing the MPDF, which will be responsible for distributing private donations to political parties, would need to be clearly separated from its duty of running the elections, and this would require the establishment of an entirely separate structure.

Its submission included a budget for its start-up and the first year of the MPDF, which included marketing, education, research, investigative capacity, legal defence costs, conferences and workshops, advertising, etc. Also needed would be auditing and other professional services and operating costs, including assets, were estimated at R34 million. The proposed wage bill for a staff of nine was rounded off to R11 million.

This raised many questions in the Committee. Members were largely shocked at the idea that administering the Fund would cost 32% of the total amount of public funding given to political parties. The concern was that R45 million would be paid out with no guarantee of any funds coming in. One Committee member asked whether a R11 million wage bill did not suggest an incredibly top-heavy structure.

The proposed budget for the MPDF was not the only consideration raised by the IEC. It also proposed double disclosure by the party and the donor, but it was pointed out that this would be onerous, and difficult to police. The IEC also argued that the sanctions for defaulting proposed in the draft legislation were weak, and it wanted to know what would incentivise the public to make donations.

The IEC’s submission came at the end of a two-day consultation process on the draft legislation which heard a range of comment on the proposed legislation from organisations and individual citizens. This legislative process has been marked from the start by extensive public consultation and commentary came from across the board.

Black First Land First (BLF) called for the scrapping of the IEC-required deposit of R600,000 to contest the elections as this “locked out” the black majority. BLF suggested instead that parties demonstrate their credentials by presenting 50,000 signatures.

It also wanted all private funding, from the Guptas to the Ruperts, to go into the Multi-Party Democracy Fund and be distributed to all parties. That would put an end to claims that the Guptas funded BLF.

BLF raised issues with the Public Funding of Represented Political Parties Act of 1997 and its 90/10 rule which distributed 90% of state funds proportionally according to the number of seats gained by each party and 10% equitably.

BLF said this funding model prevented the growth of small parties and forced parties into corrupt arrangements to source funding. It suggested that 60% of funding should be distributed proportionally and 40% equitably. The Chairperson indicated that a decision had been taken to change the 90/10 formula, even though the final decision on a formula had not been taken.

The South African Local Government Association spoke out against limitations within the current legislation that confines state party funding to national and provincial government and made a call for local government to be included.

The Department of Political Science at the University of South Africa (UNISA) raised concerns that there were still bodies linked to political parties, such as investment companies, trusts, foundations and NGOs, which could receive private donations. This could create a loophole for undisclosed funding.

UNISA recommended that all entities financially associated with political parties be included in the legislation. The same concern applied to parties from outside of the country. Party-to-party funding was not included in the Bill and if the legislation intended to prevent outside influence in the domestic affairs of the country, that loophole also had to be closed, the Unita presenters said.

There was a joint submission from the South African National Editors’ Forum (SANEF) and investigative journalist team amaBhungane. SANEF suggested the Committee study the guidelines from the African Commission on Human and Peoples’ Rights to make sure that the Bill was in line with the Model Law on Access to Information for Africa which looked specifically at funding disclosure and elections.

amaBhungane’s concern emerged out of current revelations around state capture and the vulnerability of parties to undue influence from funders. The organisation welcomed the Bill as an attempt to create a barrier between private funding and political parties but said there was still scope for undue influence as private donors could still donate to the MPDF without disclosing their identity or the sum of the donation if they requested to do so.

Citizens who made private submissions included Dr Gregory Ash who proposed a fairly complex three-level funding model, which left most Committee members fairly perplexed. It involved the three largest parties receiving the same amount of funding, a smaller amount being split amongst other parties, while new parties get an even a smaller amount of start-up funds.

He also made the point that the proposed Bill should control how political parties spend the money. The risk of a political party owning a business for example intrinsically raised a high risk of corruption because its aim would be to make money.

Another private submission came from Neil Murray who raised the issue of privacy and argued for anonymous funding for parties to continue. The Committee largely agreed that he was arguing to preserve the status quo.

Other submissions were presented by Adv Pansy Tlakula, Chairperson of the Information Regulator, accompanied by Adv Lebogang Stroom Nzama who is responsible for the Promotion of Access to Information Act (PAIA) and Liziwe McDaid, Parliamentary Officer of Organisation Undoing Tax Abuse (OUTA).

Moira Levy

Information for this article was sourced from the Parliamentary Monitoring Group.

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  • Author: Moira Levy
Last modified on Tuesday, 16 January 2018 18:12

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